[isabela capre]

Just want to ask why my in my book entry of cash is not the same with the cash balance in the bank? If I close my total expenses where should I entry it. Tnx.

Isabela

[ROLCAM]

The differences can be accounted for by
Performing what is called a Bank Reconciliation.
These are differences :-
1) Either because your Cash Book has not caught up with some entries that the Bank has made ; or
2) The Bank has not posted the latest entries,
That you have made.

Total expenses are NOT posted anywhere.
It is individual expenses that are.
They are posted in the Purchases Journal.
They are all DEBITS because they are expenses.
The Credits are posted to the Bank Account.

[pready]

You only close your Expense accounts at the end of your financial reporting period. You close your expense accounts to the Income Summary account and you close your Revenue Accounts to the Income Summary Account as well, then you close your Income Summary Account to your Retained Earnings Account.

This is done to transfer Net income to your Balance Sheet.

[codyman144]

First question like ROLCAM said it is called a bank rec. Difference is usually due to float.

For Example say you cut checks for vendors dated 12/22/09, and record this entry on your books as 12/22/09 which is correct.

However, they have to go through the mail, have someone pick them up, deposited in the bank, and then wait to clear your bank. This process can easily take several days and more in some cases. Your bank has not charged your account for it yet but you have recorded the deduction to your cash account.

Second question I am really not getting you, are you talking about closing your books, which would mean revenues and expenses?